Can your social media activity affect your credit score?
Image Source: Jason Howie
There have been some recent headlines indicating that FICO, TransUnion and other credit information aggregators are using social media data to assess credit worthiness. These stories seem to indicate that if you post about being drunk or engaged in other risky behavior, your credit score could drop. As of this moment, however, it is NOT true that FICO and the three credit reporting agencies – TransUnion, Equifax and Experian – are using social media activity to rank you. But that doesn’t mean Tweets and Vines won’t impact scoring in the future. Will Lansing, CEO of FICO, told the Financial Times, “If you look at how many times a person says ‘wasted’ in their profile, it has some value in predicting whether they’re going to repay their debt.”
Clean up your social media act to protect your credit and reputation
Even though social media checks are not a current filter used by FICO and credit agencies to assess your credit worthiness, it could happen at any time. Also, your current or future employer may screen your social media activity looking for inappropriate behavior and posts, and this could cost you the job you have – or a shot at a future job. If you routinely post language, photos or videos that show you in a negative light, now is the time to clean up your channels – before you are judged and found lacking. In addition to cleaning up your profiles, check to see if you’re tagged in photos or posts, and have those removed too.
New credit score considers other non-traditional data
Social media evaluation may be the next big thing but, for now, you should know that new criteria have been used to develop credit rankings for those with thin credit files who may have had a low (or no) score before. FICO has developed FICO Score XD, and TransUnion has come out with a new calculation called CreditVision. These new score calculations consider utility, phone and rent payments to establish a score. According to FICO, close to 53 million Americans don’t have enough payment information to warrant a credit score calculation at all. The new calculation methodology will help about half of these consumers have a credit score where they had none previously.
Using FICO Score XD, consumers who had no score before were rated at 620 or greater, which is enough to qualify for many car or auto loans and can be life-changing for those who thought themselves ineligible for any type of credit. The development of new scores is a result of banks and lenders looking for new lending markets to help combat lower interest rates and decreased demand for debt spending. But it can also be a boon to consumers. FICO’s Christina Goethe says, “FICO Score XD can be a lifeline for millions of previously unscorable people. A majority go on to maintain good credit and achieve high traditional FICO scores.”
Bankruptcy can help rebuild credit after a personal financial crisis
You may have a credit score, but it’s dismally low because you got behind on your bills, maxed out your credit cards, and went into collections on many accounts because of a financial crisis of some sort. Perhaps you had a period of unemployment or an accident or illness that kept you out of work. A divorce or other life upheaval may have increased your expenses for a time such that you fell behind on your debts. No matter what happened or why, recovering from a major life event like these can feel impossible. Chapter 7 bankruptcy is a solution that offers a fresh start by discharging unsecured debts including medical bills, credit card debt, personal loans, some older tax debts, and outstanding balances on utilities and other debts. Wiping out this debt in bankruptcy allows you to start immediately reestablishing your credit score so you can have a brighter financial future.
To find out more about the benefits of North Carolina bankruptcy, contact the Law Offices of John T. Orcutt today. Call +1-919-646-2654 for a free consultation at one of our convenient locations in Raleigh, Durham, Fayetteville, Wilson, Greensboro, Garner or Wilmington. Be sure to ask about zero down bankruptcy specials!